ABSTRACT
It is common
knowledge to see a lot of organisational resources committed into product ideas
that have not undergone proper research, especially market based research. As a
result, it is either that the product fails out rightly or gains marginal
success. No wonder we have so many of such product wasting in the market places
begging for demand. When a product idea carries a weight of benefits to give to
the market even the market will be anxious waiting for it to be launched.
Besides proper research into developing a quality product, there is also the
need for a wide range of management activities of the product from its
conception to maturity or until it is being disposed such management activities
include providing appropriate strategies for pricing, promotion, distribution
as well as on-going support to customers who have purchased the new product
pertinent to the above the study aimed at assessing new product development and
management in Nigeria. However the following objectives were formulated: To
determine the relationship between marketing research and new product
development; To determine how new product development influences customer
satisfaction and retention; To determine the impact of technology, skilled
manpower on new product development; To identify critical factors, both
marketing and otherwise for new product success or failure and To identify the
impact of new product development on profitability of an organisation. The
study had a population of 44. The descriptive survey design was adopted for the
study while chi-square was used to test the hypotheses. The findings showed
that there is relationship between marketing research and new product
development. Also new product development influence customer satisfaction and
retention. Furthermore technology, skill manpower have impact on new product development
and finally there is relationship between new product development and
profitability. The study recommended that firms should periodically evaluate
their product so that they will be able to be ahead of their competitors and
make profit.
TABLE OF CONTENTS
Title page - - - - - i
Certification - - - - - iii
Dedication - - - - - iii
Acknowledgements - - - - - iv
Abstract - - - - - v
Table of Contents - - - - - vi
List of Tables - - - - - vii
CHAPTER ONE
INTRODUCTION
1.1 Background
of the Study - - - - - 1
1.2 Historical Background of Unilever
Nigeria Plc - - - 3
1.3 Statement of the Problem - - - - - 5
1.4 Objectives of the Study - - - - - 6
1.5 Research Questions - - - - - 7
1.6 Hypotheses
of the Study - - - - - 7
1.7 Significance of the Study - - - - - 8
1.8 Scope of the Study - - - - - 9
1.9 Limitations
of the Study - - - - - 9
CHAPTER TWO
REVIEW OF RELATED LITERATURE
2.1 Introduction - - - - - 10
2.2 What
Is “New” About New Product? - - - - 10
2.3 What Is A New Product Development? - - - - 11
2.4 What Is Product
And/Or Service Management? - - - 12
2.5 Sources of New Product - - - - - 13
2.5.1 A new product can also come into being
through three major processes 14
2.6 Product Classification - - - - - 16
2.7 Market Research and
New Product Development - - - 18
2.8 The Scope of Market Research - - - - - 20
2.9 Research Institutes
and Products Development - - - 23
2.10 New Product Planning - - - - - 23
2.11 Stages in New Product Development Process - - - 24
2.2.1 Introduction Stage - - - - - 31
2.12.2 Growth Stage - - - - - 32
2.12.3 Maturity Stage - - - - - 33
2.12.4 Saturation Stage - - - - - 33
2.12.5 Decline Stage - - - - - 33
2..12.6 Decline and Possible Abandonment - - - - - 34
2.13 Product Introduction Stage – Strategies - - - - 36
2.13.1 High Profile Strategy - - - - - 36
2.13.2 Selective Penetration Strategy - - - - - 37
2.13. 3 Preemptive
Penetration Strategy - - - - - 37
2.13.4 Low Profile Strategy - - - - - 37
2.13.5 Growth Stage – Strategies - - - - - 38
2.13.6 Maturity Stage – Strategies - - - - - 38
2.13.7 Declining Stage – Strategies - - - - - 39
2.14 Consumer Adoption Process - - - - - 40
2.15 Management and Funding
Of New Product Development - - 41
2.16 Sources
of Finance - - - - - 50
2.17 Product
Mix Strategies - - - - - 53
2.17.1 Product Packaging - - - - - 55
2.17.2 Product Branding - - - - - 55
2.17.3 Product Labelling - - - - - 56
2.17.4 Products Colouring - - - - - 56
2.18 Why New Products Fail - - - - - 57
2.19 Costs of Failure of New Products - - - - - 60
2.20 Corrective Measures
against New Product Failure - - - 62
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Introduction - - - - - 63
3.2 Research Design - - - - - 63
3.3 Sources of Data - - - - - 63
3.4 Data Collection Instrument - - - - - 64
3.5 Questionnaire Design and Administration - - - - 65
3.5 Sample SizePopulation of the Study - - - - - 66
3.6 Sample Procedure - - - - - 67
3.8 Reliability of Instruments - - - - - 68
3.9 Data Treatment Technique - - - - - 69
References
CHAPTER FOUR
4.1 Presentation and Analysis of
Data - - - - - 71
4.2 Analysis of
Questionnaire - - - - - 71
4.3 Testing of Hypotheses - - - - - 89
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Introduction - - - - - - 96
5.2 Summary of Major Findings - - - - 96
5.3 Conclusion - - - - - 97
5.4 Recommendations - - - - - 97
5.5 Suggestions for Further Studies - - - - - 99
Bibliography
Appendix
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
New product development process
allows firms to deal with progressively intensive competition when facing
challenges from rapidly changing market condition. Companies try to gain
sustainable competitive advantages with continues innovation. These effort are
critical for the companies because introducing a new product to the market is
expensive and challenging due to acquiring new knowledge and technologies and
implementing new processes.
New Product development is a
business and engineering term, which describes the complete process of bringing
a new product to the market. In other words, Product development is the process
of designing, creating, and marketing an idea or product. The product can
either be one that is new to the marketplace or one that is new to your
particular company, or an existing product that has been improved. In many
instances, a product will be labeled new and improved when substantial changes
have been made.
According to Kotler(2006:633),
a product is anything that can be offered to a market to satisfy a want or
need. However, product is much more than just a physical object. It is the
complete bundle of benefits or satisfactions that buyers perceive, they will
obtain if they purchase the product. It is the sum of all the physical,
psychological, symbolic, and service attributes.
In the words of Stanton,
(2001:121), a Product is a set of tangible and intangible attributes which the
buyer may accept as offering wants-satisfaction. For instance, in the Nigerian
Soft drink industry we have products such as Malta Guinness from Guinness
Nigeria Plc, Maltina drink from Nigerian Breweries Plc, Mirinda from 7 UP Nig.
Plc; in the detergent sector, there are Elephant Blue Detergent from PZ
industries Plc, and Omo, Key Soap, Loyco, Blue Band, Lipton Yellow Label Tea,
Knorr (Acquired in Dec. 2005 from Cabury), Pears Baby Care, Lux, Vaseline,
Close Up, etc from Unilever Nigeria Plc. Also in the financial sector, there is
Master Card from UBA Plc, Child Trust and Maxi-yield from Sterling Bank Plc, to
mention but a few.
A product is similar to goods
in accounting. Goods are physical objects that are available in the
marketplace. This differentiates them from a service which is a non-material
product. The term goods is used
primarily by those that wish to abstract from the details of a given product.
As such it is useful in accounting and economic models. The term product is
used primarily by those that examine the details and richness of a specific
market offering. As such it useful to marketers, managers, and quality control
specialists.
A “man” can also be an
“experience”, which like .a service is intangible. However an experience is
unique to the receiving individual based upon their history Example: amusement
parks offer rides (product), acceptance of credit card ‘(service), and audience
participation at the dolphin how (experience). My value the dolphin show is
different from yours, and the extent to which I value it trade for it (money).
Joe (2008:53) states that such
“items as legal and medical services, hair cut, vehicle repairs and classroom
teaching also constitute product, even if they are not physical in nature. It
is perhaps in consideration of this double nature of product and also in view
of the fact that purchasing implies selling that Kotler (2003:342) defines a
product as “anything that can be offered to the market for attention,
acquisition, use or consumption that might satisfy a want or need”. He added
that product “includes physical objects, services, persons, places organization
and ideas”, noting that persons and organizations can attract buyers’ attention
and that a person’s records or ideas for instance can be purchased, while an
organization can be promoted.
1.2
HISTORICAL BACKGOUND OF UNILEVER
NIGERIA PLC
UniLever Nigeria Plc is a
multinational organization that was incorporated in 1924 and listed on the Nigeria
Stock Exchange as a Public Limited Liability company in 1973. Its vision is “to
be the biggest and most profitable consumer product company in Nigeria” and its
mission slogan is ‘it add vitality to life” The Company is 5O.O4% owned and
controlled by Unilever Overseas as the Parent/technical partner and 49.96% by
Nigerians. It has total number of shareholders of 90,648 and shareholding of
about three billion.
Besides, its share holders’
fund is in the sum of N5.57Billion which also tallies with the amount of its
net asset. The company made a profit after tax for the current financial year,
2009 to the tune of N1,616,457,000.00
It has its registered/Head
office at NO.1, Billingsway, Oregun, Ikeja, Lagps and regional offices at
Abuja, Ibadan and Jos, as well factory sites/industrial estates at Agbara,Ogun
state, industrial road Aba, and Billing way, Oregun, Lagos. Besides, it has
over 101 distributors nationwide as their marketing outlet network. Before now,
the company was known and called by different names such as : Lever Brothers
(W.A.) Ltd (till 1924), West African Soap Co. Ltd (till 1955); Lever Brothers
(Nig) Ltd (till 1973) and Lever Brothers of Nigeria Plc (till 2001).
The business sector activities
of the company includes Manufacturing and Marketing of Consumer Products such
as home care and personal care products and foods In other words, UniLever
Nigeria Plc is involved in the manufacturing and marketing of the following
lines of products: Non-soapy detergents/Laundry Soaps (Omo, Rin, Vim, Key);
Food/brinks (Lipton Yellow Label Tea,, Home Cup Tea, Royco, Blue Band, Oroyo);
Bakery Products (Breadeen, Marva, Hossum, Masterline Special); Personal
Products (Close Up, Respondent, Vaseline, Petroleum Jelly, Lux, Fresh, Esteem,
Satin Sheen, Reward, Shield, Pears, etc) as well as industrial and
institutional detergents: Last year, 2005, the brilliant execution of OMO
Activation Awareness Campaign in Nigeria, resulted in the company winning the
Silver Trophy of the prestigious Asia/AMET Activation Award. The substance of
the campaign was that Nigerian Parents should not, because of ‘dirt’, deny
their children the opportunity to play (which is very good for children)
because Omo is more than capable to deal with the dirt.
The company has a 9-member board
of Directors made up of Seven Nigerians and two expatriates (a British and
Ivorien) and is chaired by Mr. Felix A. Ohiwerei. The choice of Unilever
Nigeria Plc as a case study provides an opportunity for delving into this
research in its broadest sense so as to recommend solutions if any that may
exist or establish the need to assess the development and management of new
product development as an antidote, so to speak, for organizational survival in
a competitive market and structured economy such as Nigeria, no matter the
market leadership status such organization has already attained.
Over the years, the company has
been making steady growth and good return on investment to its shareholders as
evidenced by its profitability, capital appreciation, good dividend yield,
earning per share and price earning ratio. The year financial summary of the
company, from 2005 - 2009 showed that it been profitable, with good EPS and
giving good returns of dividend to its investors, except in 2009. Presently, it
has a net asset base of N5.5b. Being one of the market leaders among the
conglomerate sector, its competitors are mapping out aggressive marketing
strategies to gain a remarkable percentage of s market share. Hence the need
for UniLever Nigeria Plc to engage in series of new product development and
management in their various brands so as to have a high brand premiums.
New Product development as a
veritable strategy for gaining the market, especially in a competitive business
environment, involves quality improvement, increasing the functional
performance of a product such as durability; reliability and taste, feature
improvement, addition of new features that expands the product versatility,
safety and convenience and a strategy of style improvement which aims at
increasing the aesthetic appeal of the product in contrast to its functional
appeal. UniLever Nigeria Plc have shown that it wants to continue to outperform
itself and the industry by being the source of new product ideas and customer
services
1.3 STATEMENT OF THE PROBLEM
Since the advent of the
industrial revolution, business environment has become sensitive and highly
competitive. In order to survive and achieve their goals and objectives, it
behooves business organizations to systematically adapt to changing needs of
the consumers and create products that meet their yearnings and desires.
Successful New product development is necessary for the survival of marketing
organizations. It is however a challenging and risky business, often because of
the following reasons.
It is a common knowledge in
Nigeria to see a lot of organizational resources committed into product ideas
that have not undergone proper research, especially market-based research. As a
result, it is either that the product fails out rightly or gains marginal
success. No wonder we have so many of such products wasting in the market
places begging for demand. When a product idea carries a weight of benefits to
give to the market, even the market will be anxiously waiting for it to be
launched.
Besides proper research into
developing a quality product, there is also the need for a wide range of
management activities of the product from its conception to maturity or until
it is being disposed. Such management activities include providing appropriate
strategies for pricing, promotion distribution as well as on-going support to
customers who have purchase the new product.
New product development
requires enormous funding, even from the stage of idea generation and up to the
time such product is withdrawn from the market. It is expected that the
management, having determined the source of financing the new product
development project, prepares in advance an estimated cash flow statement on
the project based on estimated sales revenue and the total cost involved. They
(management) should also prepare a contingency budget to take care of all
exigencies so that the variances and discrepancies would be brought to light.
New Product development imposes
a greater task on the manufacturers/producers to strive in satisfying their
customers and retain their loyalty if their goals and objectives are to be
achieved, this calls for a good leadership. And given that the project (new
product development) requires enormous funding, management should adopt both short
and long term marketing programs to ensure that a new product survives its
cycle profitably.
New product, for the purposes
of this work, will include original products, improved products, modified
products and new brands that the firm develops through its own Research and
development efforts. The development of a new product should be a continuous
process and should be given serious management supports for the survival of
business organizations.